EU could hit Microsoft with big fine on Wednesday

Wednesday may be an interesting day at Microsoft's offices. A new report claims that the long threatened fine against the company from the European Union could be revealed on that day, due to Microsoft's violations of a 2009 anti-trust agreement with the EU.

The report comes from the New York Times and comes after a previous report from Reuters that the fine would be imposed by the end of March. If the NYT story is true, it means that the EU's timetable has been moved up a bit.

In 2009, Microsoft signed an agreement with the EU that would give owners of Windows-based PCs in Europe a required menu that would display many different web browsers to download, including Microsoft's own Internet Explorer. Microsoft did admit in July that a number of Windows-based PCs did not display the required web browser download menu in Europe.

The company said a software glitch was to blame and has since sent out an update to the affected Windows 7 PCs to restore the menu. It has also said it will continue to show the menu screen beyond the previously agreed to time period.

Even with the apology, the software fix and the extended time period for the menu, the EU could impose a fine on Microsoft that in theory could be as much as 10 percent of its total annual worldwide revenue, which puts an upper limit of $7 billion for the fine. 

Source: New York Times | Image via Microsoft

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As a EU citizen I'm ashamed by this ridiculous behavior of the EU. I also wonder when Google will be next (they seem far more intrusive in my humble opinion, yet they should not blame the companies but educate the users themselves instead...)

What they're doing now, is moronic: Very simple comparison: force a local butcher to put advertisements for other butchers nearby in his store so people can "choose" and "be informed"...

So apart from those stupid regulation committees, which people in the EU can't vote for directly, don't be judgmental towards the citizens, where most people would disagree with this ruling in the first place.

MS should base their EU distribution channels through North Korea. Maybe they'll get more favorable terms.

The way this article is worded is worded is largely responsible for the skewed view of the comments in this thread. Do yourself a favor and read the source article.

Let's reword this in a more neutral fashion:

In 2009, Microsoft signed an agreement with the EU that would give owners of Windows-based PCs in Europe a required menu that would display many different web browsers to download, including Microsoft's own Internet Explorer.
In 2009, Microsoft was found guilty of breaking anti-competition law in the EU with its Internet Explorer web browser. It did not pay a fine, but agreed to install a system offering alternative browsers for five years instead.

Microsoft did admit in July that a number of Windows-based PCs did not display the required web browser download menu in Europe.
Millions of users of the Windows 7 SP1 version from February 2011 to July 2012 were not offered the required choice of browsers.

The company said a software glitch was to blame and has since sent out an update to the affected Windows 7 PCs to restore the menu. It has also said it will continue to show the menu screen beyond the previously agreed to time period.
The company said it only learned of the glitch when the commission notified them, and subsequently fixed the issue. [Nowhere does the article state that Microsoft would continue to show the screen beyond the agreed to time period]. Microsoft emphasized that it was a regrettable mistake.

Even with the apology, the software fix and the extended time period for the menu, the EU could impose a fine on Microsoft that in theory could be as much as 10 percent of its total annual worldwide revenue, which puts an upper limit of $7 billion for the fine.
Microsoft faces a fine of up to $7 billion, however analysts say it is highly unlikely to ever reach that level. The largest fine ever levied for an antitrust case was $1.4 billion against Intel in 2009.

“The commission (...) has an incentive to slap on a big fine in this case to ensure that companies, which are hard to monitor, get the message that it will be costly down the road if they get caught defying settlement orders,” said Nicolas Petit, a professor of competition law and economics at the University of Liège in Belgium.

theyarecomingforyou said,
Exactly. People don't seem to understand the reason the browser ballot was required, nor that the fine is unlikely to be anywhere near the $7bn maximum.

Doesn't matter what the fine is, there shouldn't be one nor should the EU single out one particular company.

ingramator said,
Doesn't matter what the fine is, there shouldn't be one nor should the EU single out one particular company.
The EU doesn't single out Microsoft. Any company that breaks its laws is subject to prosecutions. Intel had a bad taste of it that same year, Google is currently under investigation.

If the EU doesn't take disciplinary actions against those who defy its orders, then it won't be taken seriously. This is what any responsible authority does.

ingramator said,
Doesn't matter what the fine is, there shouldn't be one nor should the EU single out one particular company.

Your ignorance to the EU's tough stance on anti-competitive behaviour is embarrassing. The EU is in no way singling out Microsoft. It has fined hundreds of companies for various violations, including: Toshiba, Panasonic, Samsung, LG, Philips, Intel, DHL, UPS, ArcelorMittal, Eni, Shell, Total, Dow Chemical, Aventis, Daiichi Pharmaceutical, Gretsch-Unitas, Hynix, Infineon, NEC, Hitachi, Mitsubishi, Irish Sugar, Air Canada, Air France, British Airways, Cathay Pacific, Singapore Airlines, Qantas, Michelin, Telefonica, Portugal Telecom, Degussa, Nippon Soda.

It has also exempted companies from fines for revealing cartels, including: Micron, Roto, DHL, Lufthansa, Aventis.

The idea that Microsoft is being singled out is simply nonsense.

Yeah but, 7 billion? That is singling out Microsoft with the largest fines ever. Oh well they need to stabilise the euro...

Riva said,
Yeah but, 7 billion? That is singling out Microsoft with the largest fines ever. Oh well they need to stabilise the euro...

That's the maximum fine that could be imposed but analysts have said the fine is highly unlikely to be anywhere near that. The largest fine ever imposed by the EU was €1.1bn and that was against Intel. So again, there's absolutely no evidence to support the notion that Microsoft is being singled out.

Unfortunately this is a classic case of Neowin misrepresenting a story to make it appear more sensational and people taking the bait.

If this were a European company facing the same issues with the US government there would be an endless queue of Americans talking about how it was tough because they violated us law. Well the same applies here, misguided patriotism and US nationalism do not outrank European law, sorry.

helios01 said,
MS hasn't been a monopoly for a long time, why are they even under this type of scrutiny?

No longer a monopoly in what?

In the desktop pc market, Windows is as much a monopoly as it was when this issue was first investigated.

Not sure on the fine, but I've seen this screen being more than an annoyance when installing W7 and W8 on pc's.
Don't know how many pc's were affected with the 'glitch', but I've never seen a pc that didn't show the 'choose a internet browser' screen....

Why not charging Linux for putting Firefox or chrome as default browser or Mac safari or chrome os. This is ridiculous everybody knows how to download a browser.

*sigh*

> Why not charging Linux for putting Firefox or chrome as default browser or Mac safari or chrome os.
Because, for the 1000th time, they are not a monopoly in the desktop OS market.

> This is ridiculous everybody knows how to download a browser.
You'd be surprised.

The EU need money to help poor people who will get a job from MS, Google, and Apple. I am sure that EU will fine them often. Worst monoploy number 1: Google

gameboy1977 said,
The EU need money to help poor people who will get a job from MS, Google, and Apple. I am sure that EU will fine them often. Worst monoploy number 1: Google

Oh, this gave me a good idea. How about the EU force Google next with a pop-up on google.com to show other search engines out there like Bing, Baidu etc?

And if they don't comply "Sorry but we think 7bn is exactly the right amount to fine you" sounds good huh?

alwaysonacoffebreak said,
Oh, this gave me a good idea. How about the EU force Google next with a pop-up on google.com to show other search engines out there like Bing, Baidu etc?

Microsoft was fined because, amongst other things, it was putting pressure on OEMs not to install competing browsers, which is in breach of competition law. If Google is guilty of the same behaviour then it should face similar consequences.

Google has been investigated by the EU numerous times and it has been forced to alter its business practices - it is also facing a significant fine for its search practices and privacy violations.

theyarecomingforyou said,

Microsoft was fined because, amongst other things, it was putting pressure on OEMs not to install competing browsers, which is in breach of competition law. If Google is guilty of the same behaviour then it should face similar consequences.

Google has been investigated by the EU numerous times and it has been forced to alter its business practices - it is also facing a significant fine for its search practices and privacy violations.

Please shut up, you are embarrassing yourself. This is nothing more than fund extraction. If they actually were concerned about browser monopoly they would apply the rule to ALL companies. Why does Apple get off free when their iOS doesn't even let you run a different browser apart from Safari. Everything else on there HAS to use the safari engine. It's ridiculous and you know it, I mean 7 Billion dollars, seriously.

ingramator said,
It's ridiculous and you know it, I mean 7 Billion dollars, seriously.

As already stated, that's the maximum possible fine. There is absolutely no indication that the fine is going to be anywhere near that high.

I swear it Microsoft should've done just like they did with Windows N and released a Windows NB (no browser) for the EU market and leave it to OEMs to integrate IE or whatever browser they chose.

Because this is a bit over the top. 10percent of their global revenue? So basically the EU even wants to benefit from sales that didn't even happen on their soil. Isn't that called unjust benefiting? Isn't there laws against such things?

ctrl_alt_delete said,
I swear it Microsoft should've done just like they did with Windows N and released a Windows NB (no browser) for the EU market and leave it to OEMs to integrate IE or whatever browser they chose.

They can't. Windows Help files depend on the IE engine, as do many pieces of software. (For example, Quicken's main screen is rendered with the IE engine.)

When the EU fines a company it's seen as a desperate money grab. When the US fines a company it goes without mention. Lovely hypocrisy.

Microsoft violated EU law and breached a court order. Were an individual to do the same they could expect jail time, so why shouldn't Microsoft be held to account financially?

What is the point of this fine? It doesn't go to Google or Mozilla or Opera devs, it goes to line the notoriously empty pockets of the EU.

I wonder if there's a way for MS to get out of this because it's complete crap.

siah1214 said,
What is the point of this fine? It doesn't go to Google or Mozilla or Opera devs, it goes to line the notoriously empty pockets of the EU.

I wonder if there's a way for MS to get out of this because it's complete crap.

Not going to dispute that the EU is generally rubbish. I have no love for politicians, especially those in Brussels!

Presumably Microsoft would be able to appeal the fine in court which is undoubtedly be what they did if they did indeed get hit with a fine.

Chicane-UK said,
Cue the usual garbage about the EU being destitute and needing to extort money from American companies like Microsoft. Yawn.

Please do explain how did the EU actually loose 7 billion when MS removed the screen?

alwaysonacoffebreak said,

Please do explain how did the EU actually loose 7 billion when MS removed the screen?

The EU population according to their governments is too stupid to make their own browser choices apparently.

alwaysonacoffebreak said,

Please do explain how did the EU actually loose 7 billion when MS removed the screen?

They set out terms which Microsoft agreed to, and then failed to comply with. Presumably the scope of any potential fine was explained at the time the agreement was made. I fail to see how one of the most powerful software companies in the world were unable to develop a functioning solution to avoid this fine so as far as I am concerned they should be taken to the cleaners.

Chicane-UK said,

They set out terms which Microsoft agreed to, and then failed to comply with. Presumably the scope of any potential fine was explained at the time the agreement was made. I fail to see how one of the most powerful software companies in the world were unable to develop a functioning solution to avoid this fine so as far as I am concerned they should be taken to the cleaners.

^This.

alwaysonacoffebreak said,

Please do explain how did the EU actually loose 7 billion when MS removed the screen?

That's one of the problems when you are a company that makes lots of money, the amount you are fined grows with it.

What would be the point in giving them a small fine?? They could just pay but continue to break the law, pay to win style.

exotoxic said,

That's one of the problems when you are a company that makes lots of money, the amount you are fined grows with it.

What would be the point in giving them a small fine?? They could just pay but continue to break the law, pay to win style.


Just like Google does!

exotoxic said,

That's one of the problems when you are a company that makes lots of money, the amount you are fined grows with it.

What would be the point in giving them a small fine?? They could just pay but continue to break the law, pay to win style.

I'm not saying I'm against them getting fined, sure they break the "law" and all but still, 7 billion? I'd like to see how did they come up with this sum.

On a side note, since IE is far from dominating the market now this "law" should be either sanctioned against all OS's (mobile included) or should be canceled against Microsoft.

alwaysonacoffebreak said,
I'm not saying I'm against them getting fined, sure they break the "law" and all but still, 7 billion? I'd like to see how did they come up with this sum.

Read the article then!

Chicane-UK said,
They set out terms which Microsoft agreed to

I always find it funny when people think companies etc. "agree" to things. The threat of force exists. If you chop off your finger with a gun to your head I wouldn't say you agreed to it.

MrHumpty said,

I always find it funny when people think companies etc. "agree" to things. The threat of force exists. If you chop off your finger with a gun to your head I wouldn't say you agreed to it.

That implies that Microsoft are held against their will in some way. The difference here is they could have applied a little more resource to sort this out and it would have cost them significantly less in developer hours than the potential fine could be.

seriously EU, try to find other ways to raise money. is switzerland a part of EU? why don't they raid the swiss banks and use the black money hidden there to finance themselves? doubt those bank account holders would want to report that

Arpit said,
seriously EU, try to find other ways to raise money. is switzerland a part of EU? why don't they raid the swiss banks and use the black money hidden there to finance themselves? doubt those bank account holders would want to report that

Swiss is not part of EU.

pgn said,
EU is bankrupted trash that needs to strong arm companies to stay afloat.

You mean much like how Microsoft used to strong arm competition?

pgn said,
EU is bankrupted trash that needs to strong arm companies to stay afloat.

I guess that the same applies to the US fining companies like GSK and BP billions of dollars then?

Order_66 said,
You mean much like how Microsoft used to strong arm competition?
Screw the competition. They never forced the user's to buy Machines with Windows on them. There were *always* alternatives.

HSoft said,
Money grab. simple as that.

Just like the US government did with GSK, BP and numerous other companies. And guess what? All those companies violated the law.

theyarecomingforyou said,

Just like the US government did with GSK, BP and numerous other companies. And guess what? All those companies violated the law.

i'm sorry, but GSK and BP are completely independent issues, unless your trying to compare killing people, oil well fires and miles and miles of polluted oceans to forced browser choice..

spudtrooper said,
i'm sorry, but GSK and BP are completely independent issues, unless your trying to compare killing people, oil well fires and miles and miles of polluted oceans to forced browser choice..

I'm not trying to compare the two. I was simply pointing out that when companies break the law - regardless of whether it's in the US or the EU - they can be fined significant amounts of money. That doesn't mean it's a "money grab".

theyarecomingforyou said,

Just like the US government did with GSK, BP and numerous other companies. And guess what? All those companies violated the law.

I understand the point you're trying to drive with demonstrating how the US has fined companies, but please stop comparing things like this to what happened with BP. As someone who lives in the gulf coast region, it makes me cringe every time I see you mention that. Breaking the law is one thing, but how the law was broken is another story entirely. I'd hate to see the deal with BP being reduced to a comparison with a software ballot screen.

theyarecomingforyou said,

... break the law - regardless of whether it's in the US or the EU - they can be fined significant amounts of money...

Stop. Just, please stop your nonsense.

The natural and physical catastrophes and being morally responsible for them (BP, GSK) are not even in the same cosmos of international law as an arbitrary EU subcommittee strongly-worded threat for a browser ballot pop-up window while sitting on your fat ass surfing the 'Net in your web browser of non-preference.

There's a real fscking WORLD outside. JESUS!

dead.cell said,
I understand the point you're trying to drive with demonstrating how the US has fined companies, but please stop comparing things like this to what happened with BP. As someone who lives in the gulf coast region, it makes me cringe every time I see you mention that. Breaking the law is one thing, but how the law was broken is another story entirely. I'd hate to see the deal with BP being reduced to a comparison with a software ballot screen.

Microsoft violated EU law and was punished - part of that punishment required Microsoft to display a browser ballot. Not doing so may have been an honest mistake but that doesn't excuse violating a court order. Competition law is taken very seriously in the EU. Sure it doesn't have the same material impact that an oil spill does but that's like saying rape isn't really important in comparison to murder - that doesn't negate the seriousness of the crime.

Also, people are operating under the assumption that the EU will impose the maximum possible $7bn fine, when it may be substantially lower - especially considering that Microsoft admitted the error. For all we know the fine could be just a few million, which would be entirely reasonable. It also depends on whether there is evidence that Microsoft did this deliberately or is guilty of serious negligence, which would necessitate a much larger fine.

As for the BP fine, I'm not trying to down play it. In fact given the environmental damage and obvious neglect / criminal behaviour it should have been much higher.

(*&$ the EU. Seriously. Why don't you go fine Apple & Google 1.7 Trillion for the things they control/omit.

Let me guess, you're American. Typical how you always say stuff like this, but when it's the US fining a company from another country you have nothing to say.

Typical greedy corrupt Americans. What this boils down to is that you see this as the EU taking away money from the US so you bitch about it.

Avi Patel said,
a $7 billion fine for something so trivial as a computer glitch??
honestly, that's a bit harsh.

Given microsofts long and glorious track record of dishonesty do you really believe it to be a "glitch"?

Order_66 said,

Given microsofts long and glorious track record of dishonesty do you really believe it to be a "glitch"?

Yeah I do and they took fast action in correcting the issue.
What's funny to me is that the company that brought the browser monopoly issue up was opera and even now after their market share hasn't moved up one bit.

ctrl_alt_delete said,

Yeah I do and they took fast action in correcting the issue.

Of course they took fast action, but was it because it was a genuine mistake or was it because they were caught?
Of all the possible glitches why did it have to be the browser choice window and not something else?

I bet I know...

Is it because the browser poll isn't global and therefore possible to sneak past QA without being noticed because a fix for something that was not EU specific might have broken the ballot?

Avi Patel said,
a $7 billion fine for something so trivial as a computer glitch??
honestly, that's a bit harsh.

Firstly, that's the maximum potential fine. Secondly, a computer glitch does not excuse violating a court order. Thirdly, the fine is relative to Microsoft's position in the market - if Microsoft's violation of competition laws resulted in billions of dollars in economic gain then a fine of equal or greater amount is perfectly reasonable.

Order_66 said,

Given microsofts long and glorious track record of dishonesty do you really believe it to be a "glitch"?


Yeah right.

Why did it took EU sooooooooooo damn long to find out about this glitch in the first place?

Crimson Rain said,
Why did it took EU sooooooooooo damn long to find out about this glitch in the first place?

The EU was aware of the issue at least as early as last July. However, it takes time to conduct a thorough investigation and determine the appropriate actions.

Order_66 said,

Of course they took fast action, but was it because it was a genuine mistake or was it because they were caught?
Of all the possible glitches why did it have to be the browser choice window and not something else?

I bet I know...

Seeing as MS is the one that reported themselves to the EU, I vote for mistake.

Order_66 said,

Of course they took fast action, but was it because it was a genuine mistake or was it because they were caught?
Of all the possible glitches why did it have to be the browser choice window and not something else?

I bet I know...

They reported it. You know much less than you think.

Declaring yourself entitled to 10% of all revenue within your domain (European nations) would already be absurd.

Declaring yourself entitled to 10% of global revenue stretches silly beyond recognition.

MrHumpty said,
They reported it. You know much less than you think.

Were they hoping the EU would go easier on them if they reported themselves?

Order_66 said,

Were they hoping the EU would go easier on them if they reported themselves?


Yes, I'm sure a multi-billion dollar company was playing chicken with the EU. Their board meetings were all "hey lets release sp1 w/o the browser ballot screen... then report it and see what happens."

Seriously conspiracy theorists are idiots.

MrHumpty said,
They reported it. You know much less than you think.

No, they didn't. Microsoft was contacted by the EU Commission after reports that the BCS was not being displayed on some PCs. The company conducted an investigation and then discovered the error. It's covered in Microsoft's press statement: http://www.microsoft.com/en-us...2/Jul12/07-17statement.aspx

As for the fine, the reason that Microsoft is facing a big fine is that the company stated to the EC in December 2011 that it was in compliance with the ruling when they'd been in breach of it since February 2011. Microsoft failed to ensure its compliance with the agreement and gave false information to the EC.

The amount of misinformation and ignorance in this topic is outstanding.